Academic management

Microeconomics and macroeconomics are the two fundamental parts into which economic theory is divided. The subject Introductory Microeconomics represents students’ first contact with the fundamentals of theoretical economic analysis and forms part of the Economic Analysis module.

The subject confronts students with the basic objective of economic analysis, namely the allocation of scarce resources. After introducing this problem we develop the basic theory of the market in its role as the fundamental institution for allocating resources. We then analyze the efficiency of competitive markets and these are compared to other market structures.

This subject is part of the Economic Anallysis module and, within this module, it is included in Microeconomics area.

Prerequisites for the subject are a high-school level of mathematics (for Spanish students, equivalent to the Bachillerato de Ciencias Sociales). The student should be capable of solving systems of equations, calculating derivatives, and representing and interpreting functions.

The basic objective of the course is for the student to become familiar with and be able to use the basic tools of economic analysis and to be able to think like an economist.

Degree in Business Administration

The generic competences that students are expected to achieve are:

Capacity for analysis and synthesis.

Learning capacity.

Ability to work autonomously.

Capacity to make decisions

Critical and self-critical capacity.

Ability to apply knowledge in practice.

Ability to organize and plan

Adaptability to new situations

Concern for quality and a job well done.

Have ethical values ​​and behaviors

Integrate democratic values ​​and the culture of peace in the workplace

Integrate the principles of equal treatment and opportunities between women and men in the workplace

Integrate the principles of equal opportunities and universal accessibility for people with disabilities

The specific competencies worked on are:

Understand the basic mechanisms of operation and structure of markets.

Understand the economic-institutional environment and its impact on business decisions.

Plan and manage the human resources of an organization

Transmit information, ideas, problems and solutions in the field of business management to both a specialized and non-specialized audience

At the end of the course, the objective is to achieve the following learning outcomes:

Understand the core problem of resource scarcity and allocation.

Know the role of competitive markets as a way of allocating resources.

Know the theoretical foundations of the behavior of individuals both as consumers and workers.

Know the theoretical foundations of the behavior of companies in their decisions to maximize profits.

Understand the operation of different market structures and their consequences on economic efficiency.

Degree in Accounting

The generic competences that students are expected to achieve are:

Capacity for analysis and synthesis.

Organization and planning capacity

Ability to search, analyze and interpret information from various sources

Capacity to solve problems.

ability to make decisions

Capacity for teamwork

Ability to work in an international context

Critical and self-critical capacity

Autonomous learning capacity

Adaptability to new situations

Leadership

Creativity

Capacity for initiative and entrepreneurial spirit

Ability to apply knowledge in practice.

The specific competencies worked on are:

Develop financial management skills and knowledge

Know the techniques of determining costs in the company

Issue reports regarding the company's situation

Understand the mechanisms of market functioning.

Know the economic environment of business activity

Apply quantitative techniques in the analysis of financial information

Know the historical aspects of economic activity

At the end of the course, the objective is to achieve the following learning outcomes:

Understand the core problem of resource scarcity and allocation.

Know the role of competitive markets as a way of allocating resources.

Know the theoretical foundations of the behavior of individuals both as consumers and workers.

Know the theoretical foundations of the behavior of companies in their decisions to maximize profits.

Understand the operation of different market structures and their consequences on economic efficiency

Justify and guide the design of State intervention measures in the markets.

Degree in Economics

The generic competences that students are expected to achieve are:

Capacity for analysis and synthesis.

Learning capacity.

Ability to work autonomously.

Capacity to make decisions

Critical and self-critical capacity.

Ability to apply knowledge in practice.

Ability to organize and plan

Adaptability to new situations

Concern for quality and a job well done.

Have ethical values ​​and behaviors

Integrate democratic values ​​and the culture of peace in the workplace

Integrate the principles of equal treatment and opportunities between women and men in the workplace

Integrate the principles of equal opportunities and universal accessibility for people with disabilities

The specific competencies worked on are:

Understand the behavior of economic agents and assess their influence on the structure and functioning of markets

Understand and assess the interrelationships of economic agents

Transmit information, ideas, problems and solutions in the economic field to both specialized and non-specialized audiences

At the end of the course, the objective is to achieve the following learning outcomes:

Understand the core problem of resource scarcity and allocation.

Know the role of competitive markets as a way of allocating resources.

Know the theoretical foundations of the behavior of companies in their decisions to maximize profits.

Understand the operation of different market structures and their consequences on economic efficiency.

Brief Programme

Topic 1: Introduction.

Topic 2: Consumer behavior.

Topic 3: Production.

Topic 4: Costs.

Topic 5: Profit maximization and the competitive supply.

Topic 6: Analysis of markets

Basic bibliography

Main texts

Pindyck, R. and Rubinfeld, D. (2013), Microeconomics (8th International Edition). Pearson International Edition.

Parkin, M. (2013), Introduction to Economics, Pearson, First Edition

Complementary texts

Frank, R. (2010), Microeconomics and Behavior (8th edition). McGraw-Hill.

Juan, R. (2006), Libro de ejercicios. Economía, teoría y política. Editorial McGraw-Hill.

Krugman, P. and Wells, R. (2015), Introduction to Economics (4th edition), Macmillan.

Detailed programme

Topic 1: Introduction

1.1. The concept of economics and the opportunity cost.

1.2. The demand function.

1.3. The supply function.

1.4. Equilibrium and changes in equilibrium.

Learning objectives:

• Become familiar with and understand the basic aspects of the economic problems facing society, as well as the importance of the concept of opportunity cost.
• Become familiar with the language of economics and that of mathematics applied to economic science.
• Review the supply and demand functions and their applications when describing the market mechanism and price formation.

Reading material:

• Pindyck and Rubinfeld (2013), Chapter 1.
• Parkin (2013), chapters 1, 2, 3 and 4

Topic 2: Consumer behavior

2.1. Preferences.

2.2. Restrictions.

2.3. Consumer equilibrium and demand.

2.4. Elasticity of demand.

Learning objectives:

• Understand the basic concepts of consumer theory.
• Understand the principles of rational choice.
• Understand how changes in prices and income affect consumer choice.

Reading material:

• Pindyck and Rubinfeld (2013), Chapter 3 (sections 3.1, 3.2, 3.3 and 3.5) and Chapter 4 (sections 4.1, 4.3 and 4.4)

Topic 3: Production

3.1. Technology: The production fuction.

3.2. Production with one variable factor: Tha law of diminishing returns. 

3.3. Productionwith two factors of production: Returns to scale.

Learning objectives:

• Understand the concept of the production function of the firm and the difference between short run and long run.
• Understand how the production technology restricts and conditions firm behavior in the short run (Law of Diminishing Marginal Returns) and long run (Returns to Scale).

Reading material:

• Pindyck and Rubinfeld (2013), Chapter 6.

Topic 4: The costs of production

4.1. Costs in the short run.

4.2. Costs in the long run: Economies of scale.

Learning objectives:

• Understand how the prices of factors of production represent a new restriction for the firm and how the combination of technology and input prices determines firm production costs.
• Understand how firms choose their inputs to minimize their costs.

Reading material:

• Pindyck and Rubinfeld (2013), Chapter 7 (sections 7.1-7.4).

Topic 5: Profit maximization and the competitive suppy 

5.1. Profit maximization by a competitive firm.

5.2. Analysis of competitive markets.

5.3. Equilibrium in the short run.

5.4. Equilibrium in the long run.

Learning objectives:

• Know the characteristics of a competitive market.
• Determine the level of production which maximizes firm profits and derive the firm’s supply curve and the market supply curve.
• Understand the advantages of perfect competition in terms of resource allocation.

Reading material:

• Pindyck and Rubinfeld (2009), Chapters 8 (sections 8.1-8.6).

Topic 6: Analysis of markets

6.1. Consumer and producer surplus. Efficiency of competitive equilibrium.

6.2. Minimum and maximum prices.

6.3. Effects of indirect taxes.

Learning objectives:

• Know the advantages of perfect markets as a mechanism for allocating resources.
• Use the concepts and tools acquired thus far to analyse the effects of different types of government intervention in competitive markets.

Reading material:

• Pindyck and Rubinfeld (2013), Chapters 9.
• Parkin (2010), Chapter 11.
• Colander (2010), Chapter 14.T

The teaching methodology includes:

Work requiring attendance

• Lectures. The basic material is presented and discussed and students are given guidance about the contents to be explained in the next lecture.
• Seminars (tutorial classes). Exercises related to the theoretical contents are solved. Issues complementary to the lectures are raised and real-world cases are discussed. The objective of these classes is for students to deepen their understanding of the material and develop their capacity to analyze and apply theoretical models.

Work not requiring attendance

• Before the lectures, students should have read the material related to the contents which will be explained. The exercises to be discussed in tutorial classes or group tutorials must be done. Preparation should be made for the final exam.

Exceptionally, if sanitary conditions require it, non-classroom teaching activities may be included. If this was the case, the students would be informed of the changes made.

Teaching plan:

For guidance purposes, a summary table is presented below with the hours of the different activities distributed by topics.

The evaluation of the subject consists of two parts: continuous assessment and final exam. Continuous assessment is important as the programme develops from very basic concepts which comprise the necessary tools for understanding and assimilating later concepts. In this sense, the process of learning economic theory is similar to that of constructing a building, where first the foundations have to be laid and then the building is constructed on these foundations. Continuous assessment tries to guage whether the student has assimilated the basic concepts needed to understand the concepts which follow. As such, continuous assessment only makes sense during the teaching period. The continuous assessment and the final exam comprise the following:

• Continuous assessment. follow-up tests will be carried out (between two and four) in which multiple answer exercises and / or theoretical-practical exercises related to the contents taught up to the moment of their completion will be proposed. In addition, the qualification of the continuous evaluation can be complemented with the  resolution and delivery of exercises or comments about current news related to the subject. The total score of the continuous evaluation will be 4 points in the final grade..

• Final exam. the student must answer theoretical questions related to the subject and solve specific problems. With the exam you can get a maximum grade of 6 points. To pass the course it is mandatory to obtain a minimum of 2 points in the final exam.

The final grade in the course will be the sum of the points obtained in continuous assessment and the final exam, provided that a minimum of 2 points has been obtained in the final exam. If this is not the case and if the sum of the continuous assessment plus the exam grade is higher than 5, the final grade will be 4.9.

In extraordinary examinations, the points obtained from continuous assessment will be maintained.

For part-time students (Evaluación Diferenciada), the evaluation of the subject will consist of single, final exam worth 10 points, in each of the official exam periods.

Exceptionally, if sanitary conditions require it, non-classroom evaluation methods may be included. If this was case, the students would be informed of the changes made.

It is recalled that the Code of Ethics of the University of Oviedo is current and applicable. It can be accessed in the followink link:  Universidad de Oviedo - Código ético (uniovi.es)".

Basic Bibliography

Mankiw, N.G. (2011), Principles of Economics (6th Edition). South Western Publishing Co.

Pindyck, R.S. and Rubinfeld, D.L. Frank, R. (2013), Microeconomics (8th International Edition). Pearson International Edition.

Complementary Bibliography

Colander, D.C. (2010), Microeconomics (8th edition). McGraw-Hill.

Frank, R. (2010), Microeconomics and Behavior (8th edition), McGraw-Hill.

Sloman, J. and Wride, A. (2009), Economics (7th edition), Prentice Hall. 

In Spanish:

Blanco, J.M. (2008), Economía. Teoría y práctica(5ª edición), McGraw-Hill.

Mochón, F. (2009), Economía, teoría y política (6ª edición), McGraw-Hill.